Plumbing pensions to finally close to future accrual

Plumbing Pensions will close its scheme to future benefit accrual from 30 June 2019, as a “responsible and practical” way to protect members’ future benefits.

The £2bn scheme announced today (24 May) that roughly 2,500 members will be affected by the closure which means that plumbing employers will be required to auto-enrol their staff into a new pensions’ arrangement.

Earlier in the month, the Work and Pensions Committee expressed concerns over the closure of the scheme and said it expected its members to receive better support.

Commenting on the closure, Plumbing Pensions chief executive, Kate Yates, said: “It is sad that we need to close the Plumbing Pensions Scheme after so many years of being able to offer good value, low-cost pensions to plumbers. Our aim has always been to run the scheme in the most responsible way to ensure members receive all the benefits they are due in full.

“The trustee and the constituent organisations that jointly decide the scheme’s benefits have looked at all the options and consulted with employers. They believe that closing the Scheme from 30 June 2019 and not letting members build up any new benefits is the most responsible and practical way to protect members benefits for the future.”

The scheme, which has almost 35,000 members, said it will write to employers and active members to explain how the closure will affect them. Deferred members and those already receiving their pension will not be affected.

“We want to reassure members that the scheme is in a very good financial position with enough money to pay all member benefits built up to now, and the decision to close the scheme to future accrual helps safeguard that position,” Yates added.

Employers are being urges to seek guidance from The Pension Regulator on setting up a new pension scheme.

In January, the pension scheme extended the period where no participating employer could leave the scheme, in order to ensure the short-term future of the covenant.

Scottish and Northern Ireland Plumbing Employers’ Federation (SNIPEF) CEO, Fiona Hodgson, said: “Throughout the consultation process, SNIPEF has engaged with our members to ensure their views are represented while providing detailed guidance on the proposed changes to ensure they are fully informed.

“SNIPEF has supported closing the scheme to future accrual as the best course of action because the required future contributions for continued benefit accrual are unaffordable, both for the employers and employees.

"While closing the scheme does not remove the issue of section 75 employer debt legislation, particularly for those employers who have already triggered a debt, it does help employers avoid triggering a debt in the future particularly where they have few remaining employees in the scheme.”

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